In-Depth Analysis of ERC404: Pandora's Box or Liquidity Revolution?

ERC404 is an experimental hybrid technical solution that combines ERC20 and ERC721, featuring native Liquidity and fragmented semi-homogeneous characteristics. It establishes a corresponding inter-conversion relationship between NFT and FT through the protocol, and realizes NFTs with variable built-in attributes.

Unlike the mainstream NFTFi commercial path, the asset series of the ERC404 standard cleverly integrates the existing facilities of NFTs and FTs at the standard layer, thereby establishing bilateral Liquidity, with new features such as "card drawing", "native fragmentation", and "AMM Liquidity". If adopted by a large number of projects in the future, there will be more innovative gameplay, greater imaginative space, and development potential.

Pandora is the first project based on the ERC404 standard, with 10,000 PANDORA ERC20 tokens corresponding to 10,000 NFTs. Its NFT series features five rarity levels, with the rarity being randomized each time an NFT is regenerated. However, Pandora is only the launch project of ERC404 and cannot capture actual value from the potential future development and widespread application of ERC404; its future development depends more on the continuous operation of the project team.

ERC404 is still in the early stages and has not been long-term verified. There are currently uncontrollable flaws in the destruction of multiple NFTs, and it has not been included in the official Ethereum EIP proposal. Additionally, this standard is relatively complex and may contain unknown security vulnerabilities, posing a risk of being attacked by hackers or experiencing sudden issues.

Looking to the future, a new "blue-chip" NFT series may emerge from a series of attempts related to the Class 404 standard, along with many interesting NFT use cases and scenarios. For example, full-chain Gamefi, functional NFTs, or tool NFTs, etc. Programmable variable attributes and native fragmentation provide these NFTs with complex value empowerment possibilities, and can leverage DeFi facilities for proper pricing and even enhance financialization gameplay.